Forms of Trust and Conditions for Their Stability

Benedicte Reynaud

Cambridge Journal of Economics, 2017, vol. 41, issue 1, 127-145

Abstract: Of the three principal approaches to trust, we decided to investigate in greater detail the one in which trust is regarded as a belief that the individuals involved hold about a relationship. Trust was defined as a delegatory relationship based on anticipation of the delegatee’s behaviour. We reached four main conclusions. First, the solution to the problem posed by the indeterminacy of trust lies in the differentiation and hierarchisation of the various forms of trust—contractual, organisational and tacit—on the basis of their degree of irreversibility and stability. Second, contractual trust is unstable because it comes up against the problem of guarantees of individual intentions. This leads to the third conclusion: rational evaluation by individuals cannot by itself establish trust, which is based on collective beliefs, practices and rules. Fourth, we identified two conditions for the stability of trust: the creation of irreversibilities through adherence to a rule and the creation of a ‘confidence interval’ within which different interpretations of contradictory individual strategies are tolerated. Thus the viability of the various forms of trust depends on the ability of institutions and organisations to create rules that are likely, when applied, to produce an interval in which tolerance of mutual intentions is the norm. These analyses of trust hence highlight the role of time and period of time in the notion of trust.

Keywords: Institutions; Rules; Trust (search for similar items in EconPapers)
JEL-codes: D52 (search for similar items in EconPapers)
Date: 2017
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